Are Proposed Pot Taxes Too High?

Are Proposed Pot Taxes Too High?

A protestor outside Denver Beer Company earlier this month during a joint giveaway put on by the campaign against the marijuana tax proposal. [Photo: CPR/BMarkus]

Marijuana is on Colorado’s November ballot again, but this time it’s about taxes. The state and some local governments are asking voters to impose hefty taxes on recreational pot. The issue has split the marijuana community and united some strange bedfellows.

Recently, opponents of the pot taxes gathered in front of the Denver Beer Company to hand out free joints. Attorney Rob Corry is treasurer of the “No on AA” campaign, which opposes the statewide tax proposal. He helped write Amendment 64, which legalized recreational pot last year. That campaign was built around the slogan “Regulate Marijuana Like Alcohol.”

“That was how the drafters, myself included, sold it to the voters,” said Corry. “We want to treat this like the Denver Beer Company with their beer right there.”

If the state and local ballot measures pass, pot taxes could be three times the rate for beer and alcohol. Corry said that defeats the purpose of legalizing it.

“When you overtax something, you create a black market,” said Corry, “an underground market that is not taxed and not regulated in any way.”

As Corry was giving joints away outside the Denver Beer Company, Governor John Hickenlooper was inside, speaking at a fundraiser for the campaign supporting the taxes.

Campaign spokesman Rick Ridder said, if passed, the money will pay for things like school construction.

More importantly, he said, “it’s a tax that will assure that we keep the federal government out of Colorado.”

He thinks it will do that by adequately funding enforcement of marijuana laws. Enforcement has been the chief problem in regulating medical marijuana.

“Our example of regulating thus far has failed miserably, both at a state and city level,” said concerned mom Gina Carbone.

Carbone was a vocal opponent of Amendment 64, but she supports the proposed taxes.

“Hopefully we’re raising some funds to actually get this regulated,” she said.

The state taxes could bring in an estimated $67 million a year.

Denver is also seeking a pot tax of its own, championed by Mayor Michael Hancock, who also campaigned against Amendment 64.

“I’m definitely very concerned about the fact that we’ve now legalized it,” Hancock said, “[and] what the impacts will be on our children.”

Denver is asking voters to approve an additional 3.5% sales tax that will bring in an estimated $3.4 million annually to city coffers. Some say that’s too high, but Hancock says it’s better than starting too low.

“Then to have to come back and say, ‘You know what? We’ve been stealing from other existing programs and priorities in order to cover the implementation of this new opportunity,’” said Hancock. “We are just simply are not going to do that. I’d rather be smart about it.”

There is lots of debate about what the proper rate should be.

“Certainly there’s gonna be a level, a number that we hit, that is too high for the consumer base to take,” said Kristi Kelly, a co-founder of the medical dispensary Good Meds in Lakewood. “That will have the consequence of driving the black market, but we don’t know what that number is.”

She says medical patients will probably stay with medical, which won’t be subject to these new taxes.

Marijuana prices are historically low, and Kelly says even though a tax rate of around 30% may seem like a lot, it will make a typical purchase of an eighth of an ounce of marijuana go from $30 to about $38.

“You’re still within the range of something that’s very reasonable," said Kelly. “You’re not breaking the bank.”

She and most marijuana businesses support the taxes. How many industries in this day and age support a tax on themselves?